The Federal Budget and Libraries

The Federal Budget this week had a lot of opportunities for libraries and was nicely aligned with the FOPL and CFLA agenda. (Your FOPL membership also makes you members of CFLA). We recommend that you watch the federal envelope closely for grant and funding opportunities. FOPL will be too.

In this e-mail we communicate where to find the Federal Budget documents and provide you with the official summary.

There are federal funding opportunities for public libraries in this budget. Read the following highlights that relate to our sector and focus on indigenous partnerships, digitization initiatives, employment, STEM, training, $300m over 10 years to equip creative spaces and hubs, and more related to Innovation.

Specific Highlights for Public Libraries to watch are related to indigenous programs and programs for the digital economy are clipped below:

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Budget 2017 is proposing to invest $89.9 million over the next three years to support Indigenous languages and cultures.

This includes:

$69 million to significantly enhance the Aboriginal Languages Initiative. This new funding will support a range of activities such as developing learning materials, funding language classes and culture camps, and archiving Indigenous languages.

$14.9 million for Library and Archives Canada to support the digitization of existing Indigenous language and cultural materials. Funding would also support the development of an Aboriginal Oral Testimonies Project to document Indigenous heritage.

$6 million for the National Research Council Canada to develop, in collaboration with Indigenous stakeholders, information technology to preserve oral histories by converting speech to text, and creating other interactive educational materials.

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PREPARING FOR THE DIGITAL ECONOMY

More and more aspects of Canadians’ lives are touched by digital technology on a daily basis. Digital skills are increasingly relevant—in school, at home and in the workplace. To ensure that Canadians have the digital skills they need to succeed, the Government intends to invest in developing and supporting the digital skills of younger and older Canadians, and groups that are underrepresented in the digital economy.

Teaching Kids to Code

Providing educational opportunities for digital skills development to Canadian girls and boys—from kindergarten to grade 12—will give them the head start they need to find and keep good, well-paying, in-demand jobs. To help provide coding and digital skills education to more young Canadians, the Government intends to launch a competitive process through which digital skills training organizations can apply for funding. Budget 2017 proposes to provide $50 million over two years, starting in 2017–18, to support these teaching initiatives.

Expanding Digital Learning Opportunities

Digital skills widen Canadians’ access to a world of possibilities. Budget 2017 proposes $29.5 million over the next five years for a new Digital Literacy Exchange program. The program will support non-profit organizations to implement initiatives that teach basic digital skills, including how to use the Internet safely and effectively, at pre-existing facilities such as public libraries, refugee housing complexes and seniors’ homes. The program will focus on vulnerable groups such as low-income individuals and families, and seniors.

Developing Assistive Technology

Assistive technologies such as screen readers, alternative keyboards and refreshable braille displays can make it easier for Canadians with disabilities to more fully participate in the digital economy. To expand the range of assistive technologies, and to give more Canadians better access to digital services, the Government proposes to establish a new Accessible Technology Development program. This program would co-fund innovative projects led by private sector firms, non-profit organizations and research institutes, to develop new assistive devices and technologies. Budget 2017 proposes to invest $22.3 million over five years to establish this program.

Targeted Improvements to Internet Inclusivity

According to the Economist Intelligence Unit, Canada is tied for 8th out of 75 countries in terms of Internet inclusivity. Canada does particularly well on measures of Internet affordability—ranking first overall. Canada is also successful in terms of Internet quality and availability and in terms of having local and relevant Internet content. An area where Canada can improve, however, is by addressing digital divides that result in some Canadians being underserved by the digital economy. The Digital Literacy Exchange and Accessible Technology Development programs proposed in Budget 2017 will enable Canada to make progress in this important area.

SKILLS, INNOVATION AND MIDDLE CLASS JOBS

Making Home Internet Access More Affordable for Low-Income Families

Access to the Internet opens up a world of opportunities—from social connections with friends and family to new ways to learn and work. Most Canadians are already online, but many low-income families face financial barriers to access, such as the cost of purchasing a computer and the high cost of an Internet connection at home. Budget 2017 proposes to invest $13.2 million over five years, starting in 2017–18, in a new Affordable Access program, which will help service providers offer low cost home Internet packages to interested low-income families. As the cost of computer hardware is also a barrier for some families, a target of 50,000 computers refurbished through the existing Computers for Success Canada program will also be distributed to families, along with the low-cost Internet packages. To better understand how Canadians use digital technology, Budget 2017 also proposes to allocate $5 million over five years, starting in 2017–18, for Statistics Canada and private sector-led surveys on the impact of digital technology in Canada.

What Success Will Look Like

Dave, 35, is a single father of two young children. Unable to complete high school when he was a teenager, Dave is currently working full-time in a retail job but hopes to obtain his high school diploma and possibly go to college. Because of his work and family responsibilities, Dave would prefer to take high school classes online, so that he can be at home with his children while he studies. Unfortunately, his monthly expenses make it difficult to save for a quality home Internet connection and a computer. Beyond his own needs, Dave is also worried that the lack of a computer and Internet connection will affect his children’s ability to participate in school and learning activities outside the classroom. When the Affordable Access program is in place, Dave will be able to contact an Internet service provider that offers low-cost Internet packages to low-income families. Dave will also be eligible to receive a free refurbished computer so he and his children can access the Internet to learn and play.

Promoting STEM to Young Canadians

Young Canadians are curious, talented, entrepreneurial and well-educated— traits that make them well-positioned to deliver the next great breakthrough in science, technology, engineering and mathematics (STEM). In order to unlock this potential, young Canadians need to have equal access to the formative experiences that can spark new ideas and inspire careers in these important fields. This is especially true for those young Canadians who are traditionally underrepresented in the STEM fields, including women and Indigenous Peoples.

The PromoScience Program helps to introduce diverse groups of young Canadians to the power and potential of these exciting fields through hands-on learning experiences, such as space camps and conservation projects. To support these efforts, Budget 2017 proposes to invest $10.8 million over five years, starting in 2017–18, to allow PromoScience to support more STEM learning activities for Canadian youth—in particular underrepresented groups. Teachers also play an important role in keeping students engaged in formal STEM learning, and in developing the culture of innovation that Canada needs today, and in the future.

Budget 2017 proposes to invest $1.5 million over five years, starting in 2017–18, to expand the Prime Minister’s Awards for Teaching Excellence to include 17 new STEM-themed awards. These awards will recognize teaching excellence and allow for broad sharing of teaching practices at the national level. To help more Canadians learn about and celebrate extraordinary accomplishments in research excellence, Budget 2017 also proposes to create a new Prime Minister’s Gold Medal. This award will recognize scientific excellence and bring greater international acclaim to Canadian scientists and researchers.

Inspiring Ideas From Young Canadians

The Minister of Finance’s Post-Secondary Policy Forum invites postsecondary students from across Canada to play the role of public policy advisor, and contribute their best ideas to the Minister of Finance. More than 40 students participated in submitting proposals on a range of important issues, tackling challenges ranging from how to reform the Employment Insurance system to better fit with the modern economy, to how to moderate housing prices in hot real estate markets, to how to encourage investment in Canada through tax reform. Every submission provided a fresh perspective and inspired policy-makers to rethink their approach to solving Canada’s most pressing challenges. The winning submission—a proposal entitled “Recalibrating Canadian Labour Development for a Precarious Economy”—was submitted by students at McMaster University. In recognition of their creative and innovative thinking, the student team was invited to Ottawa to further discuss their idea and attend events related to Budget Day, 2017.

SKILLS, INNOVATION AND MIDDLE CLASS JOBS

A NATION OF INNOVATORS

To help Canada realize its potential as a global leader in innovation, the Government must ensure that its services best meet the needs of Canada’s innovators and job creators. That includes finding new ways to deliver business innovation programs. Budget 2017 proposes measures that will help deliver simpler, more efficient and more coordinated support to Canadian entrepreneurs, global companies looking to set up shop in Canada, and global investors considering partnerships with innovative Canadian firms. In advancing the Innovation and Skills Plan, Canada and Canadian firms face several challenges: Bringing Canadian innovations to market. Canada’s governments and postsecondary institutions invest significantly in science, research and development, but Canada’s business community tends to underinvest in these areas. As a result, Canadian discoveries and innovations often find greater success—and create good, well-paying jobs—in other countries. To better support job growth in Canada, the Innovation and Skills Plan needs to better support business investment in research, and help bridge the commercialization gap.

Streamlining Canada’s innovation programs.

While the Government broadly supports any initiatives that help make Canadian companies more innovative, at present, the vast array of innovation programs makes it difficult for businesses to find and secure the support they need. The Innovation and Skills Plan must simplify Canada’s existing suite of innovation programs, make them more client-centric, and ensure that they offer the best support to Canadian innovators. This is particularly important in industries where certain groups, such as women, are underrepresented. Attracting investment and encouraging growth in Canada. Canada is home to many small businesses and innovative start-ups, and is recognized internationally as a good place to invest. At the same time, too many Canadian companies believe that in order to grow, they must relocate outside of Canada. To ensure that good, well-paying jobs stay in Canada, the Innovation and Skills Plan must develop better tools to help attract investment and support the growth of a diverse range of Canadian companies.

What Success Will Look Like

Superclusters that will make it easier for innovators and potential customers to work closely together on research, development and demonstration activities that pursue major commercial opportunities, to boost productivity, and create jobs and drive economic growth.

Greater collaboration between creative thinkers from all parts of society, who can work together to solve the shared challenges that matter for Canada (such as encouraging more equal participation in the workforce) and spur innovation and growth within the economy.

A stronger track record for attracting and retaining high quality business investments that build on Canadian technology and industrial strengths.

Better support for Canadian innovators, including better access to more streamlined, simpler and timelier help that responds to business needs and is focused on results.

INNOVATION CANADA: A NEW APPROACH TO SUPPORTING CANADIAN INNOVATORS

To make it easier for Canadian innovators to access and benefit from Government-led innovation programs, the Government proposes to review dozens of innovation programs situated across many departments to see how they might be consolidated and simplified. This will reduce the amount of legwork and paperwork required, give more timely and more relevant access to innovation services, and ultimately put more money in the hands of Canadian innovators.

SKILLS, INNOVATION AND MIDDLE CLASS JOBS

Calling for Change

“The Council strongly recommends reviewing and retooling Canada’s innovation programs to support Canada’s 21st century inclusive growth ambitions. This would involve examining current programs, eliminating ones that are not effective, redirecting resources, and adopting the analytical frameworks to create effective innovation programs and manage them using data. To help Canada compete globally, Canada must fund innovation programs that are relevant in a changing context and that support a coherent, agile and data-driven innovation ecosystem.”

—Advisory Council on Economic Growth, Unlocking Innovation to Drive Scale and Growth, February 6, 2017

Budget 2017 proposes to establish Innovation Canada, a new platform led by Innovation, Science and Economic Development Canada that will coordinate and simplify the support available to Canada’s innovators. To better support Canada’s innovators, Innovation Canada will: Lead the creation of Canada’s economic growth strategies. Working with leading Canadian innovators, Innovation Canada will develop six Economic Strategy Tables to identify innovation opportunities in advanced manufacturing, agri-food, clean technology, digital industries, health/bio-sciences and clean resources. The Economic Strategy Tables will set ambitious growth targets for Canadian innovators, identify sector-specific challenges and “bottlenecks” to innovation as well as barriers to greater participation across gender lines, and lay out specific strategies to help innovators achieve their targets. The Economic Strategy Tables will help guide the Government in its efforts to provide relevant and effective programs for Canada’s innovators.

Budget 2017 is the next step in the Government’s long-term plan to create jobs and strengthen the middle class. Canada is home to a well-educated and highly skilled workforce, but as the demands of the workplace change, so too must the education and skills workers bring to their jobs. The changes in the economy—both here at home and around the world—present incredible opportunities for the middle class and those working hard to join it.

With its strong focus on innovation, skills, partnerships and fairness, Budget 2017 takes the next steps in securing a more prosperous future for all Canadians. It helps hard-working, talented and creative people develop the skills they need to drive our most successful industries and high-growth companies forward, and invests in Canadians’ well-being through a focus on mental health, home care and Indigenous health care.

Today, Finance Minister Bill Morneau tabled the Government’s second budget—Building a Strong Middle Class—which continues to invest in middle class Canadians at every stage of their lives, transform our neighbourhoods and communities, and give every Canadian a real and fair chance at success.

Budget 2017 will:

Equip Canada’s workers with the skills and tools they need to succeed in a changing economy. Budget 2017 places Canada’s skilled, talented and creative people at the heart of a more innovative economy. It makes smart investments to help adult workers retrain or upgrade their skills to adapt to changes in the new economy, and to help young people get the skills and work experience they need to start their careers.

Take an important step towards gender equality, with Canada’s first ever Gender Statement, which serves as a basis for ongoing, open and transparent discussions about the role gender plays in policy development.

Strengthen Canada’s publicly funded, universal health care system to meet the needs of Canadian families. Budget 2017 confirms the Government’s historic health funding agreements with 12 provinces and territories by investing in better home care and mental health initiatives that will help the families who need it most.

Advance Canada’s efforts to build a clean growth economy, by investing in green infrastructure that reduces greenhouse gas emissions, delivers clean air and safe drinking water, and promotes renewable power. Budget 2017 also takes important steps to support the Pan-Canadian Framework on Clean Growth and Climate Change.

Position Canada at the leading edge of a changing economy, by helping to ensure Canadians are able to access the jobs of the future. Budget 2017 helps connect companies on a global scale, takes an innovative and collaborative approach to solving modern challenges, and helps businesses get what they need to grow.

Build stronger communities, by improving access to early learning, child care and affordable housing. Budget 2017 takes concrete action to improve the quality of life of all Canadians, with more cultural and recreational centres, as well as safe and accessible public spaces.

Advance reconciliation with Indigenous Peoples, through investments in infrastructure and First Nations and Inuit health, actions to strengthen Indigenous communities, funding to support education and training, and measures to promote language and culture revitalization.

Make the tax system fairer for the middle class. Budget 2017 will close tax loopholes, crack down on tax evasion, improve existing tax measures for individuals and families, and eliminate measures that are inefficient or no longer effective. Through Budget 2017, the Government will also be taking steps toward eliminating tax measures that disproportionately benefit the wealthy.

By taking action today—investing in the things that Canadians need to succeed now and well into the future—Budget 2017 will help deliver a growing economy that works for every Canadian.

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“Budget 2017 is about jobs. It’s about creating good middle class jobs today, while preparing Canadians for the jobs of tomorrow. The next step in our plan for Canada’s economy is making the smart, responsible investments we need to be innovative and competitive, while improving the health of our communities, ensuring a better future for our kids and grandkids.”

This briefing looks at the federal government’s 2017 budget and the economic impact of new measures.

Highlights:

Given the weaker economic outlook and a commitment to a stable debt-to-GDP ratio, the government had little room for new measures.

The government announced $8.2 billion in new spending over the next five years—an average of just $1.6 billion a year;

To offset new spending, new revenue measures are expected to generate a total of $4.7 billion over the next five years. They include: modest tax increases on tobacco and alcohol, closing some corporate tax loopholes and eliminating some tax deductions;

The deficit is expected to peak in 2017-18 at $28.5 billion (about 1.4 per cent of GDP) and edges lower over the forecast;

The budget states the importance of not allowing the net debt-to-GDP ratio to deteriorate but provides no specific ceiling.

The Canadian economy appears to be picking up steam. Yet, structural challenges and heightened risks remain. Economic growth projections are weaker in Budget 2017 than they were one year ago, while the risk of increased protectionism looms. Canada faces having to renegotiate the North American Free Trade Agreement. There is also the risk that the United States will enact a border adjustment tax on imports to pay for corporate tax cuts, which could affect Canada’s competitiveness. At the same time the U.S. has walked away from the Paris Accord, which means Canada will be increasing carbon taxes independent of its largest trading partner. These issues were clearly top of mind when the government—taking a wait-and-see approach to what the U.S. administration does in the coming months—produced this “stay the course” budget.

In total, the government introduced few new measures, and most of the funds for these measures were found within the framework outlined in previous budgets. Net spending is set to increase by a total of just $8.2 billion over the next five years. To offset the new spending measures, the government announced a few new revenue measures. These included modest tax increases on tobacco and alcohol, the closing of some corporate tax loopholes, and the elimination of some tax deductions. New revenue measures are expected to generate a total of $4.7 billion over the next five years, with the net result that this budget adds $3.5 billion to deficits over that period.

The deficit is expected to peak in fiscal 2017–18 at $28.5 billion (about 1.4 per cent of GDP) and then edge lower over the forecast. With no timeline for balancing its books, a deficit of $18.8 billion is still projected for 2020–21. Instead, the budget states the importance of not allowing the net debt-to-GDP ratio to deteriorate but provides no specific ceiling.

Canada’s Economic and Fiscal Outlook

After two years of disappointing growth, the economy has strengthened considerably over the last six months. Stronger growth was fuelled by strong consumer spending, funded in part by the federal government’s new Canada Childcare Benefit announced in last year’s budget. The important energy sector is starting to turn around and job creation has been particularly strong recently. But despite improving economic conditions, the government’s economic outlook for the next five years has worsened considerably.

The federal budget now projects the economy to grow by an average of just 1.8 per cent per year over those five years. That is weaker than projected in last year’s budget. The downward revision is due to the deep weakness in private investment outside the energy sector, which has dampened the prospects for an export-led recovery.

The government’s projection for economic growth relies on the consensus of 15 private sector economists. According to this consensus, real economic growth will accelerate to 1.9 per cent this year after growth of just 1.4 per cent in 2016. The economy is projected to grow by 2 per cent in 2018 before slowing to an average of 1.7 per cent from 2019 to 2021. Gone are the days of growth well above 2 per cent.

The outlook for nominal GDP (essentially the sum of personal and corporate income) is even more concerning. Nominal GDP is the driver of the federal government’s biggest tax sources—personal and corporate income tax. And the projections have weakened. The forecast for oil prices is stark, with the West Texas Intermediate benchmark oil price reaching just US$56 a barrel in 2021 and keeping a lid on corporate profit growth. Meanwhile, wage gains remain soft, limiting growth in household income. Overall, nominal GDP is expected to average growth of just 3.9 per cent annually over 2017–21, putting a substantial damper on the government’s efforts to raise revenue collections.

The Conference Board of Canada’s economic outlook is similar to the consensus forecast contained in the budget. We expect real economic growth to be slightly better than consensus this year (2.1 per cent versus 1.9 per cent), but our forecast is roughly in line with consensus over the next five years (1.9 per cent versus 1.8 per cent in the federal budget). But looking at nominal GDP, even this small difference evaporates, with our outlook for nominal GDP growth being nearly identical to the outlook contained in the 2017 budget. While the government’s budget projection is reasonable, there are significant near-term risks associated with the forecast.

Given the weaker economic outlook and a commitment to a stable debt-to-GDP ratio, the government had little room for new measures. Overall, the government announced $8.2 billion in new spending over the next five years—an average of just $1.6 billion a year. To find funding for these measures, the government increased tobacco and alcohol taxes, a move that is expected to generate $700 million in new revenues over the next five years. It also eliminated the public transit tax credit, saving the government more than $1 billion over the next five years, and made a few other tax changes that are expected to generate another $1 billion.

Program expenses are forecast to grow by 5 per cent in 2017–18 after an increase of 7.4 per cent last year, due largely to transfers for infrastructure and the Canada Child Benefit. Over the 2018–19 to 2021–22 period, program spending growth is expected to slow to 2.6 per cent per year.

The government is now projecting a deficit (excluding contingency) of $25.5 billion for fiscal year 2017–18, up from $23 billion last year. Over 2017–18 to 2021–22, the deficit is projected to average $21 billion a year, identical to what the government had forecast in its Fall Economic Statement. From 2016–17 to 2021–22, the government will add $120 billion to the federal debt. Given the risks to the economic outlook, the government has also reinstated a contingency of $3 billion over each year of the fiscal projection.

Net debt to GDP (which includes assets less liabilities) is expected to peak at 35.4 per cent in 2017–18 but ease to 34.3 per cent in the final year of the outlook. (See chart.) The combination of increased debt will result in a sharp uptick in debt-servicing costs, with the government expecting interest payments to increase from $24.3 billion in 2016–17 to $33.3 billion in 2021–22.

Debt-to-GDP Ratio Remains Stable

(net debt as a share of nominal GDP, per cent)

Light on New Measures

In its first budget released a year ago, the Liberal government came out swinging, announcing a multitude of new spending measures totalling $11.6 billion in 2016–17 and $14.9 billion in 2017–18. This time around, the government had little room to manoeuvre due to a combination of a weaker economic outlook and a promise to maintain a stable net-debt-to-GDP ratio. Instead, the government outlined in greater detail the spending measures that were either announced in last year’s budget or, as in the case of increased transfers to provinces for home care and mental health initiatives, more recently revealed.

Although modest tax measures and a crackdown on tax loopholes and tax evasion provided room for a few new measures aligned with the government’s innovation and skills agenda, most of the funding for these measures was previously announced.

$225 million for a new institution aimed at finding new approaches to address skills shortages.

Some additional funding for the Youth Employment Strategy.

Funding for Pathways to Education.

EI for caregivers.

Funds to improve Indigenous post-secondary education.

$27.5 million for Employment and Social Development Canada to create a Targeted Employment Strategy for Newcomers, including helping with foreign credential recognition.

Overall, this year’s budget was a light affair.”

Wow, federal money for public libraries! Excellent work folks! It’s about time that somebody acknowledged in a meaningful way that public libraries contribute meaningfully to the fostering of innovation.

Please, fellow librarians, use this opportunity to make the case that the strategy of supporting grass roots innovation via public libraries should be key component of all government agendas. Make the case by demonstrating what you can do!

Page 72 of “Building a Strong Middle Class” (p. 74 of the pdf):

Expanding Digital Learning Opportunities

Digital skills widen Canadians’ access to a world of possibilities. Budget 2017 proposes $29.5 million over the next five years for a new Digital Literacy Exchange program. The program will support non-profit organizations to implement initiatives that teach basic digital skills, including how to use the Internet safely and effectively, at pre-existing facilities such as public libraries, refugee housing complexes and seniors’ homes. The program will focus on vulnerable groups such as low-income individuals and families, and seniors.

Related to this, the “Skills and Innovation” priority fits right in with the mandate for public libraries.

Lifelong learning, Job Skills and Digital Skills development for kids appear to be priorities, as well as innovation and more.